Valuation of health impacts of air pollution from power plants in Asia: a practical guide

Assigning a monetary value for air quality reduction and associated health outcomes of electricity generation is both difficult and essential; it is difficult because methods are cumbersome, data intensive and costly, however dollar value of cost of air pollution is imperative for formulating pollution control policy. From a practical point of view, complete and detailed studies for every power plant project is not feasible. This paper reviews Impact Pathway Approach (IPA) for valuing health costs of air pollution and recommends a streamlined methodology combining site specific studies and benefit transfer for quick assessments. The paper also illustrates the proposed methodology by applying it to an 800 MW coal-fired power plant in India. Results show that pollution abatement is economically efficient; total health cost of air pollution can be reduced to $1.05 cents per kWh from $12.58 cents per kWh with pollution abatement cost of $0.28 cents per kWh. Strengthening available regulatory measures of pollution control and implementing a rigorous monitoring program to ensure installation and use of pollution control equipment is therefore welfare improving.